Chapter 4: Law of Agency Flashcards
Can an Agent delegate duties to a Sub-Agent?
Generally, no.
When may delegation to a Sub-Agent be allowed?
- Where the principal expressly authorises the agent to delegate some of their duties.
- Where the authority to delegate can be implied from the circumstances.
- Where the delegation is in accordance with trade custom.
- In the case of necessity.
Who does the Sub-Agent work for?
He works on behalf of the Agent not the Principal. The Agent is liable to the Principal for the actions of the Sub-Agent.
Explain the Involnert Management Inc v. Aprilgrange Ltd (The Galetea) case:
- Claimants yacht caught fire and insurer refused to pay the claim. Sued the insurer and brought in the placing and producing brokers too. Placing broker was negligible but as the producing broker is the one ultimately liable to the client, they were responsible.
Explain the Lucifero v Castle (1887) Case in relation to Good Faith:
Principal engaged an Agent to buy a yacht for him. Agent found a yacht and bought it, then tried to sell it at a higher price to the Principal. Court held that the Principal only had to pay what the Agent paid for it.
Agent’s duty of good faith requires full disclosure to the Principal.
What is the Duty to Account?
An Agent has to account for all the money received in the course of agency duties.
Client money is kept separately from Agent money.
Explain the 1906 Marine Insurance Act in relation to the Duty of Account:
The broker is personally liable for the payment of a premium under the MIA. If non-payment, insurer can come after broker so caveat / lien is usually put into the contract.
What are some remedies for Breach of Duty?
- Sue the Agent for damages for Breach of Contract.
- Dismiss the Agent without notice or compensation.
- Sue the Agent for the bribe paid.
- Rescind contract and refuse commission if breach is fraudulent.
Explain Imputed Knowledge:
The law assumes that the principal is aware of any / all the information held by or has been given to the Agent.
What are the two Rights to an Agent?
- Right to remuneration
2. Right to indemnity
When is a Right to Payment implied?
When the agent is in business and does work which would not usually be done for nothing.
When do Agents lose their Right to Indemnity?
- Their actions were not authorised by the Principal.
- They were in breach of their duties as the Agent.
- The act for which they claim indemnity is illegal or void by statute.
Define Lien:
A lien is the right to retain the goods of another as security for payment of a debt.
What are the two types of Liens?
- Particular: the right to retain particular goods in respect of which payment is due.
- General: the right to retain any property used as security.
When does a Lien come to an end?
When the Principal pays or offers to pay the sum due.